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SoftBank, the parent company of Arm, wants to enter into a “strategic alliance” with Samsung. Market analysts suspect that the organization is trying to involve Samsung in the sale of Arm.

Arm develops processor architectures for smartphones. Most smartphones run on the technology. SoftBank acquired the British firm in 2016 for $32 billion. Nvidia made an acquisition offer of $40 billion in 2020. Although SoftBank accepted the deal, the acquisition was denied by regulators.

SoftBank CEO Masayoshi Son recently announced plans for a “strategic collaboration” between Arm and Samsung. Market analysts suspect SoftBank is seeking a coalition of investors for the acquisition or IPO of Arm. The strategic collaboration would include Samsung in the coalition. Reuters asked Samsung for a statement, but the Korean giant declined to comment.

Arm for sale

SoftBank made a series of botched investments in recent years, leaving the organization tight on cash. The parent company is trying to sell off Arm with an initial public offering (IPO) or acquisition. An acquisition is preferable, as current macroeconomic conditions are unfavourable for IPOs.

The problem is that Arm’s technology is used by most of the major processor and smartphone manufacturers. Should a single manufacturer attempt to acquire the organization, regulators would likely reject the deal. The buyer would gain too much control over the smartphone or processor market, potentially allowing abuse of power.

SoftBank, Arm and Samsung

Market analysts suspect that SoftBank is trying to pull off a joint acquisition. A coalition of investors increases the odds of a successful deal. “There needs to be someone in the middle mediating to bring various companies together into a consortium, and Son may be trying to play such a role”, Lee Min-hee, market analyst at BNK Investment & Securities, told Reuters.

Min-hee did not rule out the possibility of SoftBank listing its subsidiary at a later date. According to the market analyst, SoftBank may be seeking shareholders in preparation for an IPO in 2023, and inviting parties like Samsung to pre-order shares at a lower price.

Several organizations are interested in acquiring Arm. In March 2023, SK Hynix — one of Samsung’s major competitors — claimed it was considering forming a consortium to acquire Arm.

Tip: Arm sues Qualcomm for patent infringement